Innospec Inc. (NASDAQ:IOSP) has seen a decrease in support from the world’s most elite money managers lately.
In the eyes of most shareholders, hedge funds are viewed as worthless, old investment vehicles of yesteryear. While there are over 8000 funds in operation today, we look at the masters of this club, close to 450 funds. Most estimates calculate that this group oversees most of the smart money’s total asset base, and by watching their highest performing picks, we have revealed a number of investment strategies that have historically outperformed the broader indices. Our small-cap hedge fund strategy outstripped the S&P 500 index by 18 percentage points per annum for a decade in our back tests, and since we’ve began to sharing our picks with our subscribers at the end of August 2012, we have outpaced the S&P 500 index by 23.3 percentage points in 8 months (see all of our picks from August).
Keeping this in mind, let’s take a gander at the key action encompassing Innospec Inc. (NASDAQ:IOSP).
What does the smart money think about Innospec Inc. (NASDAQ:IOSP)?
At the end of the first quarter, a total of 11 of the hedge funds we track held long positions in this stock, a change of -21% from one quarter earlier. With hedgies’ capital changing hands, there exists a select group of noteworthy hedge fund managers who were increasing their holdings significantly.
When looking at the hedgies we track, Royce & Associates, managed by Chuck Royce, holds the largest position in Innospec Inc. (NASDAQ:IOSP). Royce & Associates has a $67.3 million position in the stock, comprising 0.2% of its 13F portfolio. The second largest stake is held by D E Shaw, managed by D. E. Shaw, which held a $21.3 million position; the fund has 0.1% of its 13F portfolio invested in the stock. Some other hedgies that hold long positions include Cliff Asness’s AQR Capital Management, Jeffrey Gendell’s Tontine Asset Management and Ken Griffin’s Citadel Investment Group.
Because Innospec Inc. (NASDAQ:IOSP) has experienced a declination in interest from the aggregate hedge fund industry, it’s easy to see that there was a specific group of hedgies that decided to sell off their full holdings in Q1. It’s worth mentioning that Alexander Mitchell’s Scopus Asset Management cut the biggest investment of the 450+ funds we key on, worth close to $8.7 million in stock.. Israel Englander’s fund, Catapult Capital Management, also dumped its stock, about $2.6 million worth. These bearish behaviors are important to note, as aggregate hedge fund interest fell by 3 funds in Q1.
Insider trading activity in Innospec Inc. (NASDAQ:IOSP)
Bullish insider trading is particularly usable when the primary stock in question has experienced transactions within the past half-year. Over the last 180-day time period, Innospec Inc. (NASDAQ:IOSP) has experienced zero unique insiders buying, and 6 insider sales (see the details of insider trades here).
Let’s go over hedge fund and insider activity in other stocks similar to Innospec Inc. (NASDAQ:IOSP). These stocks are Quaker Chemical Corp (NYSE:KWR), Flotek Industries Inc (NYSE:FTK), WD-40 Company (NASDAQ:WDFC), Innophos Holdings, Inc. (NASDAQ:IPHS), and Koppers Holdings Inc. (NYSE:KOP). This group of stocks are in the specialty chemicals industry and their market caps are similar to IOSP’s market cap.
| Company Name | # of Hedge Funds | # of Insiders Buying | # of Insiders Selling |
| Quaker Chemical Corp (NYSE:KWR) | 11 | 0 | 8 |
| Flotek Industries Inc (NYSE:FTK) | 12 | 0 | 3 |
| WD-40 Company (NASDAQ:WDFC) | 9 | 0 | 6 |
| Innophos Holdings, Inc. (NASDAQ:IPHS) | 9 | 0 | 5 |
| Koppers Holdings Inc. (NYSE:KOP) | 7 | 0 | 7 |
With the returns exhibited by the aforementioned time-tested strategies, everyday investors must always pay attention to hedge fund and insider trading activity, and Innospec Inc. (NASDAQ:IOSP) applies perfectly to this mantra.
